Proptech start-up?… The status quo says no

Over the past 20 years, I’ve designed many digital products across a range of businesses. In each instance, we entered the sector with fresh eyes, which is actually helpful as it provides the ability to examine the sector and its problems without any preconceptions. Of course, there are challenges, and it’s a slow process, on average taking around 18 months of working with and listening to various stakeholders from across the sector.

In the case of Rent-Hub, three years down the line and I can honestly say that we completely underestimated the size of the challenge. The housing sector is unlike any other sector I have previously encountered; if you don’t have a highly credible commercial director with a wealth of existing housing-sector relationships that can be leveraged or enough money to create the illusion of credibility, you will struggle to speak with anyone or gain any traction.

I don’t blame those people within the housing sector because there’s been a glut of ‘proptech’ start-ups offering badly engineered ‘part’ solutions, often based on a poor understanding of the sector and the challenges it faces.

Combine this with shrinking budgets and it’s no surprise that senior housing executives are taking the stance of ‘better the devil you know’ rather than taking a chance on implementing an exciting new system with the concomitant risk that down the line, the system might be poorly supported or the company goes out of business.

The above, of course, doesn’t deal with the larger problem of what we can do to make the sector fit for purpose.

The housing sector is already recognised as being in crisis and this will only get worse; it’s predicted that by 2039, the UK will be officially classified a country of renters. Even the most optimistic voices accept that our ‘build to rent’ programme will not produce the volume of housing stock needed to meet demand, and therefore it’s vitally important that housing providers, local authorities and the government understand that the only way we will avert an even bigger crisis is to fundamentally evolve the way the sector works.

The current government (as of November 2019…) needs to stop removing stock through the ‘right to buy’ initiative and the opposition party needs to drop its crazy plan to give private renters the right to buy their landlord’s property. Even with an optimistic building programme, we can’t afford to lose any further rental stock from the market.

The government must recognise that almost 90 per cent of the private-rented sector is controlled by individual landlords and that this group now plays a pivotal role in providing housing stock to both the private and social sector. We need to incentivise this group through fair and progressive legislation and taxation while also introducing a free IT system to help them run their businesses more cost-effectively and profitably, removing the need for constant Housing Benefit-impacting, rent increases.

We need to switch to a universal IT system focused on uniting all stakeholders so that they can work together as one functional body. The current system of having multiple solutions isn’t viable and, in many instances, simply encourages fraudulent activities because local authorities are unable to easily track those claiming housing benefits across multiple local authorities.

Lastly, the solution must recognise and genuinely involve the tenant in the process. Initiatives such as the National Housing Federation’s ‘Together with Tenants’ are a good start but based on our attempts to engage with the NHF, all of which were ignored, it seems like more of a PR exercise than a genuine attempt to find a solution.

I don’t think any system should be developed or supplied by one company; it should be a combined effort by the best forward-looking companies that are embracing innovation and digital transformation… not just the established players, but all proptech companies that can bring value to the table.

The problems faced by the sector can be easily resolved, but it will take a willingness by all those involved to do so. Sadly, based on our experience, I’m not sure it will happen. In today’s culture, people seem to be more focused on protecting their position rather than engaging with others to come up with a solution that could provide widespread benefits and sector stabilisation.

We experienced this personally just 23 days before the Grenfell Tower fire when we contacted Anne Baxendale from housing charity Shelter, offering to work with them to provide free support to their clients. Ms Baxendale’s response was, “I agree it’s good to have tools to help aid better communication between landlords and tenants, but this isn’t an area we are looking at ourselves at the moment, so I don’t think we have much to add.” We resubmitted our offer, but Shelter refused to engage further.

A similar example relates to Emma Dent Coad, the MP for Kensington and Chelsea, who made headlines in January 2019 when she said, “The government is ignoring warnings, our constituents are going to bed afraid and current measures are not working.” Ms Dent Coad went on to say that the housing minister (at the time) Kit Malthouse was treating the issue “like some sort of theoretical exercise.”

Moved by this impassioned plea, we contacted Ms Dent Coad to see if we could meet her or her team to explore how we might help those that she clearly felt so passionate about. A member of her team responded, “Emma has asked me to pass on her best wishes; unfortunately, she is unable to organise a meeting as she is incredibly busy.” While I would not suggest someone was being disingenuous, it does seem to reflect a political theme of saying one thing publicly, while doing another behind the scenes.

Despite popular belief, Brexit and climate change are not the biggest challenges facing the UK today; it’s a fragmented and dysfunctional housing system that is impacting millions and failing the most vulnerable.

There really isn’t any more time; those in charge need to evolve their thinking and start an urgent programme of roundtable discussions that are genuinely open-minded and open to all.

The opinions expressed in this article are those of Steve Reice, CEO of Rent-Hub (CB Solutions).

Footer

Welcome to the housing Technology – Trusted Information For Business Professionals in HOusing

Housing Technology is the leading technology information service for the UK housing sector and local governments. We have always believed in the fundamental importance of how the UK’s social housing providers use technology to improve their tenants’ lives.

Subscribe to Housing Technology to gain market-leading research, unsurpassed peer networking opportunities and a greater understanding of your role to transform your business.